The Acts on Financial Instruments and Anti-Money Laundering/Terrorist Financing are to be amended. By Vanda Močnik Kohek, Relationship Manager, GSS Slovenia
Important legislative updates are currently under preparation. They will enable the Slovene legislation to comply and harmonise with EU regulation and FATF recommendations.
Amendments to the Market in Financial Instruments Act
The Ministry of Finance prepared amendments to the Market in Financial Instruments Act which was up for public discussion until 12 August.
The amendments will implement EU Directive 2013/36/EU, EU Directive 2013/50/EU, EU Directive 2014/51/EU, EU Regulation No. 909/2014, abolish a few deficiencies of the present act and harmonise the act with Slovene legislation which has been changed lately or will be changed in the near future.
The main changes in the draft amendments of the act are:
- Some fines and penalties will increase and be tied to the volume of business or profit derived from violating of the act.
- Abolishment of an interim management report with the intention to decrease pressure on issuers to achieve short term results.
- Deadline for the publishing of a half year report is prolonged to 3 months after end of period.
- Conditions for CSDs are defined in a line with EU Regulation No.909/2014.
- Definitions of Slovene SMA cooperation with ESMA and with authorities in third countries.
New Prevention of Money Laundering and Terrorist Financing Act
The Office for Money Laundering Prevention prepared the first draft of a new Prevention of Money Laundering and Terrorist Financing Act, which was in public discussion up to the end of August 2015.
The new act will implement EU Directive 2015/849/ES of 20 May 2015 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing.
Part of the directive’s measures will be included in regulations and measures prepared by the government or the Office for Money Laundering Prevention.
Main novelties in the first draft of the new act:
- An assessment of the risk of money laundering and terrorist financing will be instituted as well as the adoption of measures for risk-mitigation on a national level and in organisations which are obliged to execute this act.
- The establishment of an independent internal audit for the prevention of AML and terrorist financing and the nomination of member of the Management Board to execute measures in this area in all middle and big companies obliged to execute this act.
- The act extends to third parties who can identify clients to lawyers, tax advisors, accountants, Slovene consular representatives abroad and branches or subsidiaries of EU companies, registered in countries with a high risk for ML and terrorist financing if they are obliged to comply with EU AML and anti-terrorist regulation.
- Classification of clients entitled to a simplified procedure hasn’t been greatly specified in the new draft Act. It is predicted that classification for simplified procedure will be done upon risk assessment, consideration of conditions prescribes by the Minister for Finance and guidelines of supervisory institutions.
- An obligation for a comprehensive procedure is extended to clients:
- with an owner who is a politically exposed person
- who meet regulatory criteria prescribed by the Minister of Finance - A comprehensive procedure will be abolished for cases when client’s identification isn’t done “face to face”.
- Additional measures for comprehensive identification are prescribed for clients registered in countries and with products that are predicted to be at high risk for money laundering and terrorist financing.